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Housing shortage

Incidence:

In 1990, the housing shortage in western Germany was estimated at around 1 million homes. There have been unexpected shifts in the population and its social habits, including the arrival of 750,000 German speaking immigrants in 1989 alone, a divorce rate of 130,000 a year, young single people entering the market, and an unexpected demand for bigger homes from smaller households. In the current decade alone, the number of over-60's in Germany will rise by three million to 15 million. In the first half of the 1980's the official estimate was for a 500,000 growth in the number of private households by the end of the decade, whereas the actual rise was 1.7 million -- almost all single people -- bringing the total to 27.4 million. By comparison the number of housing completions had fallen to their lowest levels for years: 177,000 in 1988 compared with 714,000 in 1973. Additional reasons for the housing shortfall are land shortages, prolonged planning procedures, green issues, and putting a priority on leisure space, and high interest rates which reduce the ability of new homeowners to take on a mortgage and make short-term money deposits a more attractive investment than property.

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